Friday, September 30, 2016

It's a little hard to see, but the medal forms a saddle point: the intersection of the two lines is a maximum in the horizontal direction and a minimum in the vertical direction... It had been a long time since I thought of equilibrium that way, but it is from von Neumann's first game theory paper, on two person zero sum games and the minimax theorem.

It is from my trip to Hungary in early September. You can read about it in Hungarian...

Thursday, September 29, 2016

The long story of whether some forms of blood stem cell (marrow) donation may be compensated seems to be coming to an end, back where it began. Here's the new HHS/HRSA regulation, saying that whether as marrow or in the blood stream, these are considered organs under the National Organ Transplant Act, so no valuable consideration can be given...

Abstract:This final rule clarifies that peripheral blood stem cells are included in the definition of bone marrow under section 301 of the National Organ Transplantation Act of 1984, as amended and codified in 42 U.S.C. 274e.

Wednesday, September 28, 2016

Here's a blog post from Scot Aaronson's blog "Shtetl Optimized". He points out that although vote trading is illegal, vote swapping seems not to be. (Apparently it's the money that matters, as in kidney exchange versus kidney sales...)

"Updates: Commenter JT informs me that there’s already a vote-swapping site available: MakeMineCount.org. (I particularly like their motto: “Everybody wins. Except Trump.”) I still think there’s a need for more sites, particularly ones that would interface with Facebook, but this is a great beginning. I’ve signed up for it myself.

Also, Toby Ord, a philosopher I know at Oxford, points me to a neat academic paper he wrote that analyzes vote-swapping as an example of “moral trade,” and that mentions the Porter v. Bowendecision holding vote-swapping to be legal in the US."

***********

Here are two passages from the Ninth Circuit opinion that I found particularly relevant.

The first says that operating vote swapping sites might be protected political speech:

"On the merits, we hold that Jones violated Appellants’ First Amendment rights. The websites’ vote-swapping mechanisms as well as the communication and vote swaps they enabled were constitutionally protected. Although California certainly has valid interests in preventing election fraud and corruption, and perhaps in avoiding the subversion of the Electoral College, these interests did not justify the complete disabling of the vote-swapping mechanisms."

The second addresses the issue of "corruption":

"Corruption. Beginning with the State’s anticorruption interest, we reiterate that we construe this interest to encompass only the prevention of illicit financial transactions such as the buying of votes or the contribution of large sums of money to legislators in exchange for political support. See WRTL, 127 S. Ct. at 2676 (Scalia, J., concurring in part and concurring in the judgment); NCPAC, 470 U.S. at 497; Buckley, 424 U.S. at 26-27. So defined, this interest was not advanced by the threatened prosecution of the owners of voteswap2000.com and votexchange2000.com. The websites did not encourage the trading of votes for money, or indeed for anything other than other votes. Votexchange2000.com actually included a notation that “It is illegal to pay someone to vote on your behalf, or even get paid to vote yourself. Stay away from the money. Just vote” (emphasis in original). And there is no evidence in the record, nor has the Secretary argued, that any website users ever misused the voteswapping mechanisms by offering or accepting money for their votes. "

Tuesday, September 27, 2016

I've recently joined the advisory board of the National Living Organ Donor Assistance Center (NLDAC), which gives certain forms of financial assistance--mostly travel assistance--to living organ donors. I expect to learn more about what they do, and can do, in the months to come.

Abstract: Over the years, the transplant community has worked to advance the care of living organ donors; however, barriers remain, including the nonmedical expenses incurred by living donors. A new center, funded by a grant from the Health Resources and Services Administration (HRSA), was established to operate a nationwide system to remove these financial disincentives. The HRSA grant was awarded to an academic institution and the daily operations are managed by a transplant professional society. Expenses are reimbursed prospectively for financially needy living donors. Combining the legislative authority and economic resources of the federal government, the research experience of an academic institution, and the management know-how of a professional society has proven to be successful. To date, the center has received 3918 applications submitted by 199 different transplant centers and receives about 80 applications per month. On average, a donor spends $2767 for their travel expenses to the transplant center. Of the 3918 applications that have been submitted, 1941 of those applicants (50%) have completed their donor surgery.

The allocation system of donor organs for transplantation may affect their scarcity. In 2008, Israel's Parliament passed the Organ Transplantation Law, which grants priority on waiting lists for transplants to candidates who are first-degree relatives of deceased organ donors or who previously registered as organ donors themselves. Several public campaigns have advertised the existence of the law since November 2010. We evaluated the effect of the law using all deceased donation requests made in Israel during the period 1998–2015. We use logistic regression to compare the authorization rates of the donors’ next of kin in the periods before (1998–2010) and after (2011–2015) the public was made aware of the law. The authorization rate for donation in the period after awareness was substantially higher (55.1% vs. 45.0%, odds ratio [OR] 1.43, p = 0.0003) and reached an all-time high rate of 60.2% in 2015. This increase was mainly due to an increase in the authorization rate of next of kin of unregistered donors (51.1% vs. 42.2%). We also found that the likelihood of next-of-kin authorization for donation was approximately twice as high when the deceased relative was a registered donor rather than unregistered (89.4% vs. 44.6%, OR 14.27, p < 0.0001). We concluded that the priority law is associated with an increased authorization rate for organ donation.

Sunday, September 25, 2016

I spoke in Lanzhou on Thursday, in Gansu Province, as part of a festival promoting the revival of the Silk Road as a market for international trade. The sponsors were Time Weekly, Readers Group (a wide circulation, Readers Digest kind of publisher...www.duzhe.com), and the provincial government.

Google translate renders the headline this way: Nobel laureate Erwin Ross: Chinese market must be designed by a Chinese economist

Author: Meng Xiao Source: Times 2016-09-20

Kwong Sunrise Photo--Al Roth

The provincial museum is well worth a visit.

And the Yellow River has some beautiful bridges: I took these photos from a riverboat at night.

I recommend the Lanzhou beef noodles, which I had for lunch The banquet food in Lanzhou is also easy for Americans--fish, lamb, beef and Yak were prominent. (Yak is a kosher animal, by the way...). And toasting goes on throughout, not just in wine but in 100 proof rice liquor...

And in case you were wondering how to spell Erwin Ross in Chinese, I think this is it:

The first of two stops on my recent trip to China was in Changsha, in Hunan province. I spoke about market design, following the publication of Who Gets What and Why in Chinese (the Chinese title was changed to The Sharing Economy, but the subtitle was still The New Economic of Matchmaking and Market Design).

Here's a picture I took of the stage, before the talk began:

Here are links to some press coverage, including a visit to ResGreen corporation, a sponsor:

Saturday, September 24, 2016

I was away and missed the academic festival to mark Dave Kreps' 65th birthday. But here's a nice account of it (after a non-sequitur first paragraph) by David Warsh at Economic Principals:It Takes (an Invisible) College

"A celebration last week of the sixty-fifth birthday of David Kreps, of Stanford University’s Graduate School of Business, marked the scholarly contributions of one of the leading figures in the integration of game theory into economics. "

Friday, September 23, 2016

There's a lot of discussion of how best to resettle refugees internationally, and of course we might be able to learn a lot about that by looking at the resettlement of internally displaced people, and other migrants. Here's a recent AER paper that looks at the matching component and finds that it matters who goes where.

Abstract: We use a natural experiment in Indonesia to provide causal evidence
on the role of location-specific human capital and skill transferability in shaping the spatial distribution of productivity. From 1979–1988, the Transmigration Program relocated two million migrants from rural Java and Bali to new rural settlements in the Outer Islands. Villages assigned migrants from regions with more similar agroclimatic endowments exhibit higher rice productivity and nighttime light intensity one to two decades later. We find some evidence of migrants’ adaptation to agroclimatic change. Overall, our results suggest that
regional productivity differences may overstate the potential gains
from migration.

ABSTRACT: Reputation is critical to foster trust in online marketplaces, yet leaving feedback is a public good that can be under-provided unless buyers are rewarded for it. Signaling theory implies that only high quality sellers would reward buyers for truthful feedback. We explore this scope for signaling using Taobao's "reward-for-feedback" mechanism and find that items with rewards
generate sales that are nearly 30% higher and are sold by higher quality sellers. The market design implication is that marketplaces can benefit from allowing sellers to use rewards to build reputations and signal their high quality in the process.

ABSTRACT: Online marketplaces have proliferated over the past decade, creating new markets where none existed. By reducing transaction costs, online marketplaces facilitate transactions that otherwise would not have occurred and enable easier entry of small sellers. One central challenge faced by designers of online marketplaces is how to build enough trust to facilitate transactions between strangers. This paper provides an economist’s toolkit for designing online marketplaces, focusing on trust and reputation mechanisms.

Wednesday, September 21, 2016

"The decision was taken by the High Council of Virtual Spaces, the official body overseeing online activity.
Iran follows a number of other countries in expressing its worries over security related to the game.
...
"Indonesia has banned police officers from playing the game while on duty, and a French player was arrested last month after straying on to a military base while trying to catch Pokemon.
A leading Saudi cleric said a fatwa (religious ruling) issued against an earlier Pokemon card game also applied to the new mixed-reality app.
The 16-year-old edict said the game contained "forbidden images" and violated an Islamic ban on gambling. But a fatwa's influence might not carry beyond that particular scholar's territory, and is not necessarily applicable to the whole country.
Earlier this week, authorities in New York state said they would ban some 3,000 registered sex offenders from playing Pokemon Go while they are on parole.
The ban is aimed at safeguarding the children who play the game."

"Most Indianapolis kids went back to class in early August. But across town, billboards, yard signs and mailers put out by schools are making a last-minute pitch to parents: Enroll your child here.

"Public schools—including traditional, district-run schools and charters—are employing ever-more sophisticated advertising and marketing campaigns. The goal is to meet enrollment targets by the time the official state count day rolls around. This year, a school’s attendance on Sept. 16 determines its funding levels for the fall semester.
...
"Carpe Diem Meridian charter school’s 2015 marketing campaign tactic—offering $100 gift cards to anyone who referred a student who enrolled—was later that year made illegal by the Indiana General Assembly.

"The law says that a “school may not offer or give, as an enrollment incentive, any item that has monetary value, including cash or a gift card that may be used at a retail store, grocery store, online store, or other commercial enterprise” to prospective students in exchange for enrolling or to anyone who makes referrals."

Google translate: "The tricky hunt for the best apprentices--The apprenticeships in Switzerland are awarded partly "too early". Agreements between educational establishments would be an antidote. But such agreements often fail."

We study decentralized college admissions with uncertain student preferences. Colleges strategically admit students likely to be overlooked by competitors. Highly ranked students may receive fewer admissions or have a higher chance of receiving no admissions than those ranked below. When students’ attributes are multidimensional, colleges avoid head-on competition by placing excessive weight on school-specific attributes such as essays. Restricting the number of applications or wait-listing alleviates enrollment uncertainty, but the outcomes are inefficient and unfair. A centralized matching via Gale and Shapley’s deferred acceptance algorithm attains efficiency and fairness but may make some colleges worse off than under decentralized matching.

From the Back Cover

"This new volume of Kagel and Roth's indispensable handbook covers the latest dramatic developments that have led experimental economics into areas such as market design and neuroeconomics, and also offers fresh insights into more traditional areas. It is all here, and all told in a manner both informative and engaging."--Gary Bolton, University of Texas, Dallas
"Kagel and Roth have done it again. While the first volume of the Handbook showed how experimental economics had reached its maturity as a scientific method, this second volume shows just how wide its reach has become, and how deep these tools can take our understanding of economic theory and human behavior. This book will change the way the world views economics."--James Andreoni, University of California, San Diego
"The contributors provide insights that will be invaluable to anyone seeking a deeper understanding of the issues at hand. I know of no other book that covers the same breadth of material in the same way. People will use this as a reference book for many years to come."--Tim Salmon, Southern Methodist University
"A worthy successor to the first volume. This ambitious and well-written book will appeal to a broad economic audience."--Tom Wilkening, University of Melbourne
"I wish every economist and economics graduate student would read this book. Those who are considering running experiments should be forced to; this is a bible in how to run good experiments. Every chapter is amazingly comprehensive and has been written by a true expert in the field. But economists who would never dream about running an experiment can benefit from reading this just as much. The beauty of experiments is that they force theorists to think carefully about their theories."--Richard Thaler, Cornell University
"This Handbook surveys one of the most important developments in economics in the last decade, the flowering of experimental economics. Led by two of the leaders of current economic theory and experimental economics, an impressive group of researchers provides the reader with an excellent up-to-date overview of one of the most fascinating and promising areas of current economic research."--Ariel Rubinstein, Princeton University
"The Handbook is not only a contribution to experimental economics, it is a major contribution to social science. It successfully combines the rigor and clarity of economic analysis with a commitment to open-minded examination of data, and a refreshing willingness to question dogma. Every student of human choice and action will find this text useful."--Daniel Kahneman, The Woodrow Wilson School of Public and International Affairs, Princeton University
"Experimental economics comes of age with this volume. At last the dust begins to clear, and it becomes possible to confront theory with coherent and reliable laboratory data."--Ken Binmore, University College of London

Thursday, September 15, 2016

Sally Satel, the tireless fighter to make kidney transplants more accessible, writes in two recent articles about her good luck in receiving organs from friends, and about how providing greater incentives to donors might work...

"Jay Timmons and Rick Olson, a married gay couple from Virginia, didn’t think they’d have any trouble becoming the legal parents of the baby boy who their surrogate, a Wisconsin woman, delivered for them last year.
They had gotten the frozen embryo that became their son as a gift from straight friends whose in vitro fertilization created more embryos than they could use. They had chosen a Wisconsin surrogate specifically because the state’s Supreme Court had upheld surrogacy, and other same-sex couples had had smooth sailing there. And by just about any measure, the two intended fathers were prime parent material: They both had good jobs, they had been together for 25 years, and they were already raising two daughters from previous surrogacies.
But their careful plans went awry the month before their son, Jacob, was born, when their effort to be named his legal parents landed before a conservative judge who saw surrogacy as a form of human trafficking. Over the next 11 months, the couple’s bizarre legal battle cost more than $400,000 and kept them in constant terror of losing their son.
...
"But the Wisconsin case is likely unprecedented, legal experts say, in that the surrogate, her husband, and the intended parents were all happy with their arrangement. Only the judge was not.
...
"Dane County Circuit Court Judge Jim Troupis, appointed by Gov. Scott Walker last year, opened his March opinion with the statement, “Human trafficking comes in many forms.” And although he went on to describe the two dads as a “spectacular set of parents’’ who would raise the child “in a nurturing environment with unmatched financial resources,’’ he made it clear that he was bothered by the fact that the couple had paid a woman to carry a baby who was not related to them.
“The fundamental fact remains that another couple has provided the child as a gift to the petitioners, and the child has no genetic relationship to the petitioners,’’ Troupis wrote. “In order to bring the child into world, the petitioners have paid a significant amount of money. Without those payments there would be no child.’’
...
"There is no federal law on the subject, and state laws vary enormously. California, for example, where Timmons and Olson hired the surrogates who delivered their two daughters, is the center of the nation’s surrogacy industry, thanks to a friendly state law.
But most states don’t have any surrogacy laws on the books. Some simply refuse to enforce surrogacy contracts. Others, including Virginia, don’t allow surrogacy unless at least one of the intended parents has a genetic connection to the baby. New York and Washington allow only unpaid, or “altruistic” surrogacy, and Michigan has criminal penalties for all types.
...
"Despite the legal limbo, because of the rise of in vitro fertilization — now responsible for nearly 2% of US births — and the legalization of same-sex marriage, demand is also rising for surrogates. And, partly to avoid legal snags, these women are generally “gestational surrogates,” meaning that they carry embryos that are not genetically related to them. According to the CDC, there were 3,432 gestational surrogates in 2013, up from 727 in 1999.
...
"Although the case was in Dane County, the liberal stronghold that contains Madison, Judge Troupis appointed as the child’s legal guardian Mark Knutson, a lawyer 70 miles away whose radio broadcast, The Word on The Law, aims to reconcile God’s word with the law. Knutson, in turn, brought in another lawyer from his firm, Erik Krueger, who had worked with Liberty Counsel, a group that defends public officials like Kim Davis, the Kentucky county clerk who refused to issue marriage licenses to same-sex couples.
...
"In November, Knutson filed a 45-page report to Judge Troupis, calling for more court oversight of surrogacy cases and arguing that rubber-stamping a gestational surrogacy contract made by two men with no genetic connection to the child would open the way to a dangerous expansion of the concept of parenthood.
Such surrogacy contracts, his report said, broker pregnancy, commodify children, and meet the needs of wealthy intended parents at the expense of the children involved.
...
"In his March decision, Judge Troupis seemed to rely on many of Knutson’s arguments. He terminated the surrogate’s maternal rights and gave the Virginia men only temporary custody, technically leaving Jacob an orphan.
...
"The Troupis decision left Timmons and Olson at a crossroads: They could continue to appeal in Wisconsin, or take a different route, pursuing an adoption in their home state of Virginia. While they weighed these options from their home in Virginia — while caring for Jacob and their young daughters — they had a lucky break: Judge Troupis resigned May 2, to try, unsuccessfully, for a seat on the Wisconsin Supreme Court.
Timmons and Olson had already moved to reopen and reconsider Judge Troupis’s ruling, but with the judge’s resignation, their case was transferred to yet another judge, Peter Anderson, who overturned Judge Troupis’s “faulty’’ opinion, which he criticized for using language that was “unduly harsh and kind of weird.’’********
HT: Kim Krawiec

Weintraub: It’s an area of economics that uses tools from game theory, econometrics, and micro-economic theory to understand how marketplaces work. It looks at what the dynamics are, and advertising auction logic that affects incentives to achieve certain objectives. It looks at how to set up rules to make the auction more efficient.

If your goal is increasing a seller’s revenue, that’s a goal market design can address. Another goal is efficiency and making markets safe. And you want to monetize the inventory, and outcomes that are fair for both buyers and sellers. Market design is having a significant impact on how digital marketplaces are being run."

The Canadian magazine Maclean's has a very polite (but nontheless interesting) essay on profanityAre we wearing out obscenities?
"Profanity sinks deep emotional roots in our brains. When words develop duelling meanings, the bad stuff almost always wins out.
...
"In short, if English should lose its surprisingly small profane vocabulary set through overusage, we would be forced to invent new obscenities. That would be no easy task, given the polished perfection of what biology, time and chance has already bequeathed us."

Here are the opening paragraphs:
"Over the last decade, the internet has made it much easier for students to apply to college, especially thanks to services like the “Common App.” For the nearly 700 schools now part of the Common Application—the nation’s leading standardized online college application portal—students can browse by name, state, or region, by the type of institution (public or private), and by whether it’s co-ed or single-sex. Clicking on a college takes students to a brief profile of the school and then an invitation: “Ready to apply?”

And now that students can apply to more colleges with the click of a few buttons, they are doing exactly that. In 2013, according to the National Association of College Admissions Counselors (NACAC), 32 percent of college freshmen applied to seven or more colleges—up 10 percentage points from 2008. Almost all of this growth has been online. In the 2015–16 admissions cycle, over 920,000 students used the Common App, more than double the number in 2008–09."

Friday, September 9, 2016

New York, September 8, 2016 —The 2016 Donald E. Knuth Prize will be awarded to Noam Nisan of the Hebrew University of Jerusalem for fundamental and lasting contributions to theoretical computer science in areas including communication complexity, pseudorandom number generators, interactive proofs, and algorithmic game theory. The Knuth Prize is jointly bestowed by the ACM Special Interest Group on Algorithms and Computation Theory (SIGACT) and the IEEE Computer Society Technical Committee on the Mathematical Foundations of Computing (TCMF). It will be presented at the 57th Annual Symposium on Foundations of Computer Science (FOCS 2016) in New Brunswick, NJ, October 9–11.

Nisan’s work has had a fundamental impact on complexity theory, which examines which problems could conceivably be solved by a computer under limits on its resources, whether it is on its computation time, space used, amount of randomness or parallelism. One of the major ways in which computer scientists have explored the complexity limits is through the use of randomized algorithms. Nisan has made major contributions exploring the power of randomness in computations. His work designing pseudorandom number generators has offered many insights on whether, and in what settings, the use of randomization in efficient algorithms can be reduced.

Nisan has been a major player in Algorithmic Game Theory, and, through his 1999 paper with Amir Ronen, has laid the foundation of Algorithmic Mechanism Design. A mechanism is an algorithm or protocol that is explicitly designed so that rational participants, motivated purely by their self-interest, will achieve the designer's goals. This is of paramount importance in the age of the Internet, with many applications from auctions to network routing protocols. Nisan has designed some of the most effective mechanisms by providing the right incentives to the players. He has also shown that in a variety of environments there is a tradeoff between economic efficiency and algorithmic efficiency. Nisan is a co-editor of Algorithmic Game Theory, a fundamental text in the field.

He is also a leading authority in communication complexity, an area of computer science research that examines the amount of information that needs to be transferred between parties for computational problems. With Eyal Kushilevitz, Nisan co-authoredCommunication Complexity, an authoritative text in the field.

Nisan is professor of computer science and engineering at the Hebrew University of Jerusalem. He is also a graduate of Hebrew University, and earned his Ph.D. from the University of California, Berkeley. He received the 2012 Gödel Prize (with Elias Koutsoupias, Christos Papadimitriou, Amir Ronen, Tim Roughgarden and Éva Tardos), the 1990 ACM Doctoral Dissertation Award for his dissertation, “Using Hard Problems to Create Pseudorandom Generators,” and the 2004 Michael Bruno Memorial Award.

The Donald E. Knuth Prize is named in honor of Donald Knuth of Stanford University who has been called the “father of the analysis of algorithms.”

"Airbnb, based in San Francisco, said that it would institute a new nondiscrimination policy that goes beyond what is outlined in several anti-discrimination laws and that it would ask all users to agree to a “community commitment” starting on Nov. 1. The commitment asks people to work with others who use the service, “regardless of race, religion, national origin, disability, sex, gender identity, sexual orientation or age.”

In addition, the company plans to experiment with reducing the prominence of user photos, which have helped signal race and gender. Airbnb said it would also accelerate the use of instant bookings, which lets renters book places immediately without host approval."
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There is a strong market design subtext to this story: Peter Coles, Airbnb's (new) chief economist, used to work at Harvard Business School, where some of his former colleagues conducted an experiment that helped focus on the possible discrimination problem.
Here's the current version of that paper:

Abstract
Online marketplaces increasingly choose to reduce the anonymity of buyers and sellers in
order to facilitate trust. We demonstrate that this common market design choice results in
an important unintended consequence: racial discrimination. In a field experiment on
Airbnb, we find that requests from guests with distinctively African-American names are
roughly 16% less likely to be accepted than identical guests with distinctively White
names. The difference persists whether the host is African-American or White, male or
female. The difference also persists whether the host shares the property with the guest or
not, and whether the property is cheap or expensive. We validate our findings through
observational data on hosts’ recent experiences with African-American guests, finding
host behavior consistent with some, though not all, hosts discriminating. Finally, we find
that discrimination is costly for hosts who indulge in it: hosts who reject guests are able to find a replacement guest only 35% of the time. On the whole,
our analysis suggests a need for caution: while information can facilitate transactions, it
also facilitates discrimination.

"With three months to go before voters decide the matter, the California Growers Associations remains divided over the statewide legalization initiative known as the Adult Use of Marijuana Act.

“Thirty-one percent say yes, 31 percent say no and 38 percent are undecided,” Hezekiah Allen, CGA’s executive director, said last week in reference to the group’s latest online survey of its membership.
...
"While CGA is a statewide organization, the bulk of its roughly 700 members — who include cultivators, manufacturers and retailers — come from three regions: The North Coast, with 161 members; the Sierra Foothills, with 145 members; and the Bay Area, with 145 members.

“Our membership [includes] the smaller, independently owned, value-added operations. We want a marketplace for those types of businesses,” Allen explained in an interview earlier this year.

The fact that there are provisions in Prop. 64 that are seen as overly friendly to big business interests and not friendly enough to small farmers lies at the heart of the doubts some members have about the measure."
***********